When it comes to introduction of a Central Bank Digital Currency (CBDC), the Reserve Bank of India (RBI) stated on Wednesday that cyber security and digital fraud are its main concerns.
At a post monetary policy press conference, RBI Governor Shaktikanta Das, said on Wednesday “Our main concern comes from cyber security and possibility of digital frauds. So, we have to be very careful about that. Just as few years ago, we had a major concern over fake Indian currency notes … similar thing can happen when you are launching the CBDC,”
He added “So therefore, in a CBDC universe, we have to be that much more careful with regard to ensuring cyber security, and taking pre-emptive steps to prevent any kind of frauds. Because there will be attempts so we have to have a robust system to combat it,”
RBI Deputy Governor T Rabi Sankar, said on Wednesday, “On CBDC, there are two kinds of work that is currently going on. One is on wholesale account based, the other is retail,”
“A lot of work is already done on wholesale accounts but the retail issue is slightly complicated and we will take some time on it. As soon as any of it is ready, we will release it on pilot basis,” he said. However, he did not divulge any timeframe for introduction of the digital currency.
The finance minister of India informed the Lok Sabha earlier this week that CBDCs are fiat currencies in their virtual or electronic form (like the Indian rupee or US dollar). The Reserve Bank of India is developing a plan to introduce digital currency in a phased manner.
These developments are at a time when the government is drafting a law to regulate cryptocurrencies. Moreover, other central banks such as the US Fed and the People’s Bank of China are also planning their own digital currencies.